A robust five-year financial plan will enable the Isle of Man Government to reinforce strong financial foundations while driving the aims of Our Island Plan and the Economic Strategy.
Delivering the 2023 Budget at the February sitting of Tynwald, Treasury Minister Dr Alex Allinson MHK focused on looking forward with purpose while addressing the challenges posed by two years of economic turbulence.
‘The economic strategy has ambitions to further develop the infrastructure and services of our community to plan for an estimated population of 100,000 by 2037 and to generate over £200m of additional annual income to reinvest in services and our quality of life by 2032.
‘In order to do this we must ensure our finances are strong and are able to support the strategy to invest in our people, our businesses and our island’s future.’
Backing this approach, a £100m Economic Strategy Fund will be established in the 2023-24 financial year to drive these ambitions and help stimulate private investment.
In terms of departmental budgets, health and care funding will receive an overall increase of £20.5m, Education, Sport and Culture £11.52m, Infrastructure £4.66m, Home Affairs £2.16m and Environment, Food and Agriculture £2.03m.
The five-year plan relies on transfers from reserves to support Government activities and stimulate the economy. This will gradually reduce as the aims of the Economic Strategy are met and revenue increases.
The income tax personal allowance will remain at £14,500 for a resident individual and £29,000 for a jointly assessed couple.
For higher earners, the personal allowance will be tapered and reduced by £1 for every £2 that a person’s total income is above £100,000 (£200,000 for jointly assessed couples). This means if a person’s total income is £129,000 (£258,000 for jointly assessed couples) or above their personal allowance will be zero.
The income tax lower rate for individuals remains at 10% and the higher rate at 20%. The threshold at which the higher rate of income tax becomes payable remains at £6,500 for an individual and £13,000 for a jointly assessed couple.
The National Insurance thresholds and upper earnings limit will be increased by 5%. Class 2 and Class 3 rates will be increased accordingly.
Maternity, adoption and paternity allowances will increase by 16.8%, while child benefit will see an uplift of 9.8%.
Approximately 3,500 individuals and families of working age on low incomes will benefit from a 9.8% rise in Employed Person’s Allowance, Income Support and Jobseeker’s Allowance.
A 10.7% increase in Carer’s Allowance will benefit almost 600 carers and around 19,000 pensioners will see their state pension increased by 10.1%.
The annual uprating of benefits is expected to raise spending by £26.4 million in 2023-24.
A five-year capital investment programme worth £442.4 million is planned, with £233.5 million allocated to Central Government schemes.
Funding for 2023-24 includes an additional £2.3 million to deliver the Sexual Assault Referral Centre, an additional £3.36m for improvements to King Edward VIII Pier, £495,000 for mobile classrooms and a further £780,000 to support the replacement of radiology equipment at Noble’s Hospital.
The Climate Change Adaptation Fund will receive a further £5.4m to help protect the Island and its infrastructure from the effects of changing global weather patterns.
Investment in the Island’s highway network will see £6.125m committed to improvements and refurbishment as part of a rolling scheme, while £1.155m will be available for structural maintenance.